Anne Pettifor

Good Lord the cretins are out in force today.

Third the Bank of England should regain control over interest rates – all rates. The interbank lending rate (Libor) should no longer be set by a committee of private bankers meeting daily at the British Bankers Association. They must be set by a committee accountable to society, and, when setting rates, must consider the interests of all who make the economy work – labour and industry – not just finance.

LIBOR isn\’t set by such a committee. It is reported by such a committee. It\’s set by the market.

And what is this "the Bank of England should regain control over interest rates – all rates"? Does this woman not know that no central bank has ever controlled all rates? The most they can ever control is the ones at which the themselves are willing to lend? That is, the Bank Rate?

How in buggery is some committee, some bureaucracy, the government itself, to set long term interest rates?

Anyone? Bueller?

5 thoughts on “Anne Pettifor”

  1. This week has been an eye-opener in how few journalist actually have any idea what they are talking about. The BBC, in particular, has had me either pulling my hair out or in fits of giggles.

  2. The idea that they can control the rates is exactly the same idea that they can eliminate interest altogether. It’s not new.

  3. Why do we have an MPC in the first place?

    Why doesn’t the Bank of England do the decent thing and charge as much interest as it can (on a risk adjusted basis) and pay as little interest as it can?

    T’would be a nifty source of revenue and hence reduce taxes a bit.

  4. hmm. I recall reading in the FT a few months ago that some of those institutions reporting to LIBOR were reporting rates lower than they were actually getting because they didn’t want the competition to know how much it was really costing them to borrow. IIRC, there was to be an investigation, but I never heard anything more.

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